In January, the City of London staged a financial inclusion conference: Next Move Forward. Speakers included the Archbishop of Canterbury and Queen Maxima of the Netherlands (UN Special Advocate on Inclusive Finance). It was a high-powered event with chief execs of high street banks, members of the Financial Inclusion Commission and the Economic Secretary to the Treasury. There was no shortage of titles.
It felt like a big deal. I tweeted all day, conscious people I was squashed between might think I was texting friends, not getting word out something interesting was going on. I engaged with it in the context of what hundreds of social tenants told Quids in! they were up against in 2014.
INFRASTRUCTURE
Justin Welby, the Archbishop, stressed how banking facilities are as integral to modern life as roads and electricity supply. Not having them creates as much disadvantage in communities, so regulation should apply. The game was pretty well up, he said, as soon as the Government had no choice but to bail them out – something it would do if none of us could afford to have the banks fail. ‘Banks benefit from society,’ he said, ‘[including everyone] is a responsibility you cannot avoid now.’
That responsibility doesn’t stop at free-to-use ATMs or making alternatives to high interest loans accessible to all, he said. Banks must invest in small enterprise to stimulate jobs – as much, if not more, in the North as in the South, which has yet to see the growth enjoyed around London.
Inclusion, Welby argued, cannot be achieved by charity, it’s not sustainable. Corporates must recognise its business value, although it’s a loss-leader in the short-term. They could facilitate community banking and measure their bottom line in the saving of the human cost of not working this way. After 20 years in social enterprise, it sounded like common sense to me.
Spinning in from a parallel universe, the Minister, Andrea Leadsom MP, did admit the crash hit the vulnerable hardest and had served the interests of high interest lenders. I switched off as she crowed about job creation in the North with unrepresentative examples but she showed a human side revealing she paid her kids money for chores but then taxed them and encouraged charity donations. ‘I’m minister for the City,’ she said, ‘if anyone’s going to do that, it’s going to be me’.
UNBANKED OR UNDER-BANKED
Group Chief Exec of HSBC Maurice Button’s opening remarks acknowledged the UK’s 1.3 million unbanked households (later qualified as 1.9 million unbanked adults). Discussion moved on to recognise a sizeable number of under-banked people no longer using their bank accounts and other financial services. This rings true: Quids In’s reader survey found in 2012 that 85% of people had an account but in 2014 only 48% of readers were using one.
We can’t blame consumers. Trust in bankers is at an all-time low, given how bailing out the banks led to austerity and the abject hardship heaped upon low income households. But even after a day of soul-searching, I can’t say I’m convinced the financiers quite understand why it’s going to take more than a few good Twitter campaigns to win people over again.
Sir Richard Pomeroy reflected on the work of the Financial Inclusion Commission in the context of the government’s welfare reforms, Universal Credit in particular. He reported on how half of the unbanked had previously had bank accounts but moved away, presenting just one of a range of cultural challenges to the way UC is administrated.
Citing the cost of financial exclusion estimated by Save the Children as £1,300, Pomeroy called on the conference to debunk the myth that poorer people are unable to save and for some lateral thinking to make it easier. As Stepchange later revealed, a nest egg of £1,000 is enough to help most people weather a financial setback, so making it simple to plan for a rainy day is a worthy first step for the finance sector to turn its pledges into actions: Auto-enrolment in work-based schemes and supermarket checkout savings opportunities, to name just two.
THE FUTURE’S DIGITAL
There’s no doubt the future is digital but Quids In! found change is too fast too soon, so my heart sunk when HSBC described tech as a ‘game changer’ that ‘provides a low cost platform to reach all’ – hundreds of millions around the globe. The world picture is of interest: Tech may empower farmers in Africa and the unbanked in India. But it is also a smoke screen, like using poverty in the developing world to suggest what’s suffered by people using UK foodbanks isn’t that bad. This glosses over injustice that is eroding communities like a cancer.
Mobiles may offer the most inclusive tech. Interactive websites or online banking may suit the IT crowd but don’t account for a lack of interest in being online. It ignores the rejection of the hassle involved in pin-to-fob-to-passkey-to-PC-to-password conundrum that leaves many bewildered and opting for paper statements (like me, so sick of forgetting something like 40 different passwords). Mobiles are more widely adopted already. If you can text a donation to Comic Relief, surely a £5 deposit to a savings account could be made the same way?
Sarah Coe of The Tinder Foundation blogged about the event, welcoming a discussion of the role of tech and the importance of digital inclusion in combatting financial exclusion. The right tech is one element. Lack of access and engagement by excluded people must also be conquered.
Another reason to apply the brakes racing to get the world online is the checks and balances have yet to be worked through. The conference acknowledged that regulators (and politicians) are woefully behind the curve when it comes to understanding what tech can unleash. Meanwhile, new systems open new threats to our privacy, our security and our rights.
When it comes to digital, we’re going in the right direction but at the wrong speed. As Barclays’ representative commented: “[If we’re not careful] digital exclusion could become the single biggest factor in social exclusion, not just financial exclusion.”
Toynbee Hall’s Sian Williams and her fellow panellists acknowledged the importance of design and a full understanding of the customer ‘in three dimensions’. With an ageing population and many who are physically or mentally unable to use the tech, we must keep an eye on exclusion.
Social ergonomics are core to the Social Publishing Project’s work. We publish a tabloid-style magazine as we know what our target audience will otherwise be reading. It’s why we don’t plan to publish the magazine online any time soon, (outside of carefully managed pilots to explore impact), because readers who need us most are not online. Lloyds quoted BBC research that found more than two thirds (69%) of people who are not online are from the C2DE demographic.
GETTING CITIES WORKING
Sir Richard Leese of Manchester City Council described a kind of ghetto fencing excluded people into permanent deprivation: High interest lenders targeting vulnerable people in urban areas; Their neighbours, Brighthouse and other wolves in sheep’s clothing, tantalising those on low incomes with unmissable deals that cost them dear; The finance sector depriving communities of entry level jobs through an insistence on credit checking applicants.
Lord Stevenson, Chair of debt charity Stepchange, took the stage towards the end of the day. He acknowledged the impact of debt on workers’ productivity, reporting 43% of people in debt say they were unable to concentrate in the workplace. Many were hiding debt from their families, compounding the emotional impact. The cost to the economy has been estimated to be £8.3bn.
In all, the conference re-ignited the conversation many of us started before the crash. It’s a welcome gesture from the City. But words must become actions. And actions must impact everyone at a local level – and that cannot be done online. Not yet.
